Introduction..

Renewable energy projects in Tanzania:

A project development perspective

Eng.%Arthur%Karomba%

www.energioverda.com%

Overview:

• Development*of*renewable*energy*projects*in*Isolated*grid*in*Tanzania*

•  Establishment*of*Mini*grid*in*off*grid*rural*communi?es*

Development of renewable energy projects in Isolated grid in Tanzania

1. Mpanda Project Specifications •  Loca7on%**

*Mpanda*town*in*the*west*of*Tanzania,*near**Katavi*Na?onal*Park*

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•  Town%profile%%%%Popula?on*of*102,000**Town’s*electrical*demand*met*by*3.5MW**diesel*genera?on*

*Addi?onal*diesel*plant*of*2.5MW*under**construc?on*

•  Proposed%project%%1MWp*plant**

%Interconnec?on*into*substa?on*at*new*diesel**plant%

Mpanda%

2. Project Economics

•  Proposed*tariff*rate:*$0.243/kWh*

•  Tariff*paid*in*$USD**•  Tariff*falls*when*isolated*grid**connected*to*main*grid;*expected*rate:*$0.12V0.14/kWh*

*

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Solar%PV%in%isolated%grids%is%good%for%investors,%good%for%TANESCO,%and%good%for%Consumers%

3. Project Development Challenges •  Land*

*Land*is*leased*from*public,*requiring*compensa?on*to*land*users*and*reVzoning*

*Acquisi?on*is*?me*consuming*and*risky:*~12*months*for*acquisi?on;*no*assurances*un?l**full*acquisi?on*

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•  PPA/FIT%%High*PPA*risks:*takeVorVpay*contract*has*many*loopholes;*no*liquidated*damages*

*FIT*regula?ons*rela?vely*untested;*high*uncertainty*in*implementa?on*and*risk*of**retrospec?ve*changes*

%TANESCO*late*payment*risk*

4. Project Financing Challenges •  Local*

*Local*equity*project*payback*?mes*usually*<4*years*

*Debt*interest*rates*~18%*

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•  Interna7onal%%Risks*within*in*contracts*and*regula?on*scare*off*investors**Few*strong*links*between*local*developers*and*interna?onal*funders*

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Without%a%track%record,%aLrac7ng%funds%for%projects%is%difficult%

5. REA, TAREA & TANESCO: key players in the sector •  REA*

*Established*to*speed*up*electrifica?on*of*rural*areas*

*Assists*project*developers*with*grants*(TEDAP),*development*assistance,*poli?cal**pressure*

*Developer%need%further%grant%funds%and%more%coordinated%lobbying%efforts%

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•  TANESCO%%Tanzania’s*na?onal*electrical*u?lity:*genera?on,*transmission*and*distribu?on**

*Late*payments*on*SPPs,*insufficient*maintenance*of*grid*infrastructure*

*Policy*&*pricing*changes*hampered*by*other*governmental*agencies*

*Developers%need%a%more%robust%and%interna7onally%bankable%PPA,%more%reliable%%upkeep%of%transmission%assets,%more%assurances%of%7mely%payments%

Mini Grid Projects: Windpower Serengeti Ltd (www.windpower-serengeti.com)

(www.ilovewindpower-tanzania.com)

Target is to eliminate poverty,especially for rural women

Wind/Solar hybrid mini grids

•  Load*assurance:*! Ligh?ng*! Socio*economic*ac?vi?es*

! Small*scale*Irriga?on*systems**

Wind/Solar hybrid mini grids (Cont..) Improvement of lighting in schools &other public

institutions

Wind/Solar hybrid mini grids (Cont..) Improvement of socio economic activities

Wind/Solar hybrid mini grids (Cont..) Small scale irrigation systems by

renewables

Wind/Solar hybrid mini grids

• Community*capacity*building*

! Maintenance*&*Opera?on*

Wind/Solar hybrid mini grids (Cont..) wind power co-operative members in training

Wind/Solar hybrid mini grids (Cont..) Wind turbines are made locally with communities

Wind/Solar hybrid mini grids (Cont..) school domitory now gets electricity from renewables

Wind/Solar hybrid mini grids (Cont..) Local made turbines now scatered in the country

Thanks*and*Karibu...*